Are young Kenyans saving enough for retirement ? And why should they save for retirement when it is so far considering the median age in the country is only 19 years old ?
Truth be told , Kenyans in general are not saving enough . Numerous studies reveal that approximately 85 % of Kenyans do not have access to pension and retirement saving schemes . Pension is important because it helps to maintain the standard of living after retirement by catering for basic needs like housing , food and medical needs . It also provides a safety net because once you retire you no longer have access to employment salary or insurance benefits that you would normally get when working or running a business .
When you start saving early , you benefit from compound interest because your money is invested and accrues a significant amount in interest over the years . The earlier you start the more you can realize once you retire or stop working for reasons such as permanent disability or critical illness .
Is there a risk of losing my pension savings ?
The risks of losing pension savings are very minimal . Pension savings are well structured and established under irrevocable trusts meaning that the Retirement Benefits Authority Act and the regulations surrounding the pension industry are stringent enough to ensure there are little to no losses of pension funds . More importantly pension assets are invested separately from the assets of the contributing employers or sponsors .
What benefits does a member get with the CPF Individual Pension Plan ?
The CPF Individual Pension Plan or Mpension is a flexible personal retirement plan designed to guarantee a dignified and fulfilled life in retirement . It is a unique and innovative product which allows members to register through mobile devices . With M-pension , members can benefit from high investment returns , flexible contributions and tax relief on contributions .
Please tell us more about the new partnership between CPF and Safaricom PLC and how this will enhance pension coverage in the country
With Mpension , you can access a pension and retirement savings platform by simply dialing * 289 # on any mobile device . CPF Financial Services has gone into partnership with Safaricom to enable more Kenyans save for their future using Bonga points . It ’ s simple . You dial * 126 #, enter Paybill no 921125 , your national ID number as the account number and redeem Bonga points towards your M-pension savings .
How can a young person that wishes to start saving calculate how much they will need when they stop working / retire ?
At CPF we employ a simple concept to calculate how much our members will need upon retirement . Multiply your current annual spending by 25 . That ' s the size your portfolio will need to be in retirement for you to safely withdraw 4 % of that portfolio amount every year to live on . Another way to look at it is to target 60-70 % of your current earnings . Our doors are wide open to offer advisory services to members and any other person looking at planning for their retirement .
What does the current financial climate mean for pension savings ? And do you think periods of economic uncertainty such as this are a good time to
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